There’s good news and bad news coming from the analyst’s corner concerning the trucking industry these days.

First the good news: as noted above by Benjamin J. Hartford, transportation analyst with Wall Street investment firm Robert W. Baird & Co., truckers are expected to enjoy (if they aren’t already enjoying) higher freight rates as capacity remains tight. According to the company’s Freight Flows brief, this upward trend in rates should have legs for a while, and that bodes very well for TL and LTL carriers alike over the coming months.

But that’s the short term view. Longer term, however, there are big challenges ahead, at least from where Noël Perry, senior consultant with research firm FTR Associates and principal of consulting firm Transport Fundamentals, is sitting.

I listened to Perry run down the list of future troubles for trucking this during FTR’s State of Freight quarterly outlook and he sounded some pretty grim notes.

First, the residential housing market remains the sorest point in Perry’s outlook as it responsible for 37% of trucking’s freight mix between 2006 and 2011. “Due to government policy and easing lending, the participation rate in housing jumped significantly, adding 500,000 extra housing starts [new home construction] annually,” he said. “Now we’re subtracting 500,000 housing starts a year.”

What that means to trucking is that, long term, a significant portion of its past revenue base won’t be recovering to full strength for years still to come. “The decline in the housing market is improving but it’s nowhere near over,” Perry said. “We’re unlikely to get back to the previous peaks for some time to come.”

The other big long term issue is growing government debt, he noted. “It’s highly unlikely we’ll get a smooth, rational solution to the problem, so the economy is going to be assaulted over the next 10 years by start-and-stop efforts to control deficits,” Perry pointed out. “What that means to trucking is that interest rates will go up as lenders recognize government is not a good risk.”

Rising interest rates contributes to a 27% reduction in GDP (gross domestic product) growth over FTR’s long-term forecast, and it also makes the U.S. economy more volatile. “That ‘volatility’ means there’s less time between upturns and downturns, with the downturns becoming worse,” Perry explained.

At the end of the day, it boils down to one thing: make money now, for in the none-too-distant future, times are going to turn sour on trucking again.

“The outlook means that, as rich as we are now, you must start preparing now for the bad times to follow,” Perry stressed.

Baird’s overview, though, indicates that truckers will indeed get the chance to gain those necessary “riches” in the short term. “First quarter earnings will be pressured among many asset-based carriers due to fuel and weather expense headwinds, but we expect outlooks among management teams to reflect guarded optimism,” Baird’s Hartford said. “Our touch points with industry contacts in recent weeks describe rising rates across most modes, as shippers are increasingly concerned about capacity availability.”

TL capacity has been unusually tight since February, he added, and importantly, shippers aware of looming constraints and accepting higher rates to secure capacity. Thus, he said the consensus for 2011 TL rate growth is roughly between 3% and 5%.

“Since the late 200s economic collapse, freight shipping patterns have not followed typical seasonality,” Hartford pointed out. “Above-trend inventory restocking activity throughout 2010 has moderated into 2011, as expected, but a first quarter freight uptick began earlier than expected. We expect freight trends to remain unusual given lean inventory levels and skepticism surrounding economic recovery, which provides an opportunity for transportation capacity providers but reduces visibility to sustainability of freight recovery.”

Curiously, fuel prices are not as huge a concern right now to either FTR’s Perry or Baird. From the numbers Baird is looking at, diesel fuel prices continue to rise, but crude oil prices seem to be stabilizing.

“Upward fuel price momentum through the first quarter represents a headwind to many transport firms, given the first quarter earnings lag in fuel surcharge recovery,” said Hartford. “However, if crude oil's recent stabilization around $100/barrel persists, we would expect diesel prices to stabilize allowing headwinds from the fuel surcharge lag to begin to subside.”

“There is plenty of oil production capacity right now – the upward price of oil is due to the ‘fear factor’ in the market,” explained FTR’s Perry. “Remember, during the last recovery the price of oil doubled, yet the economy continued to grow. And total imports have actually dropped 25% since 2006, so we’re becoming more efficient in our use of petroleum.”

The only thing that would change the game where oil is concerned is if the civil unrest experienced by Libya, Tunisia, Egypt and other nations in the Middle East spreads to Saudi Arabia, said Perry.

Still, aside from those concerns, in the short term, the overall trucking demand environment remains positive, but conviction in the economic recovery remains tempered by shaky consumer confidence given fuel and food inflation concerns and global instabilities, said Baird’s Hartford.